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What Are Some of The Costs of Buying Your First Home

The process of buying a home can be one of the most exciting (& stressful) times of adulthood, however it does come with some costs.  So let’s break these costs down & take a look at some of the most common costs you may incur from house hunting to settlement date

·      Building Report. A building report is certainly one of the musts with due diligence. A building report not only picks up any major issues, it will also walk you through things that require ongoing maintenance, & talk you through all the minor things that can require attention. General Cost of around $600 - $800 but can vary depending on size of the home, & if any additional reports are needed

·      Registered Valuation. If we can’t get to a 20% deposit, we’ll more than likely need a registered valuation for the bank. It provides you with a current market valuation, & gives comparable sales in the area, as well as general commentary around the property, & the market itself. General costs of around $700 - $1000 for a Non-Urgent Valuation

·      Meth Test. Can normally be done with the building report itself & shows any signs of methamphetamine contamination in the home. Generally the initial screening tests have a cost of around $200 - $300, but additional costs if further investigation is needed

·      Lim report. A LIM (land information memorandum) is a council file that provides you with the information that the council holds on the property & the land itself for the given property. It is a common condition in the sale & purchase of real estate, & for a LIM from the Tauranga Council, the cost of this is $255 for an email copy within 10 days, but costs do increase for more urgent reports, or if you want a paper copy.

·      Legal fees. A good lawyer is one of the best people to have on your side throughout the home buying process. They are there to guide you through every step of the process, & work in your sole best interests, & give you personal advice on most things pertaining to owning & purchasing a home. Highly recommend getting your lawyer involved early, &  normal costs of around $1700 - $2700 but can vary depending on lots of different factors like KiwiSaver withdrawals, how many properties, different areas of advice needed etc.

·      Bank fees. Some banks will charge fees on settlement dates for the lending, & all have different terms for these. General costs are around $250, but is normally offset by a cash contribution offered from the bank to thank you for your business.

·      Rates (the one that can be the big surprise) so on settlement date, you may get a surprise bill that hasn’t been accounted for, which is buying back rates from the vendor. So for example if the vendor has paid rates for a year, & you purchase the property 6 months into that year, you will be buying back rates for those 6 months that they have paid for. Costs here vary significantly as you can buy rates for different periods (annually, bi-annually etc.) but in this example, if the rates were say $2400 annually, you would have a bill of $1200 to buy back 6 months worth of property rates.